A Reckoning is Coming
Speakers
David Rosenberg
— President, Rosenberg Research
Steven Feldman
— Co-Founder, Wealthion
Summary
David Rosenberg and Steven Feldman discuss AI's disruptive impact on labor, the economy's weak underlying conditions, and why U.S. equities are overvalued relative to bonds. Rosenberg advocates for a portfolio heavy in bonds, gold, and Asian equities, warning of a severe bear market ahead.
- AI is boosting productivity but not overall economic growth, leading to job displacement and weak wage growth.
- The equity risk premium in U.S. stocks is zero compared to Treasury real yields, making bonds a better choice.
- Gold is in a secular bull market driven by central bank reserve diversification and supply-demand imbalance.
- Asian equities (Korea, Taiwan) offer a positive risk premium and are tied to the AI chip cycle.
- Recession risks are higher than priced, and inflation is likely to fall as consumer spending weakens.
- The next bear market is expected to be more severe than past ones, amplified by demographic and political factors.
- Rosenberg's portfolio is 40% equities (concentrated in Asia), 40% bonds (US, Canada, Australia), 20% hard assets.
- Political and social instability from income inequality and fiscal imbalances are growing concerns.
Ideas
Equity risk premium is zero
U.S. equities (S&P 500) are unattractive because the equity risk premium is zero when compared to long-term Treasury real yields. Investors are effectively assuming equities are riskless, which is irrational. He is not buying this market and advises caution.
Long bonds offer same yield, less risk
Long-term U.S. Treasuries are attractive because the real yield (2.7%) matches the equity market's real yield, but bonds offer certainty of payment and principal, making them a better risk-adjusted choice. Recession risks are high and inflation will likely decline, providing a cushion for bonds.
Asia equities have positive risk premium
Asian equities (specifically Korea and Taiwan) offer a positive equity risk premium, unlike the U.S. market. They are tied to the AI chip supply chain but are not as overvalued, making them a better place for equity exposure.
Up Next
This Wealthion video, published May 15, 2026, features David Rosenberg discussing SPY, TLT, Korea/Taiwan equities. 3 trade ideas extracted by AI with direction and confidence scoring.
Speakers: David Rosenberg · Tickers: SPY, TLT, Korea/Taiwan equities